Google's Goals Span Globe

Google's (GOOG) global ambitions are only growing bigger.

People using Google Earth, the search-engine giant's satellite map feature, can jump from the company's headquarters in Mountain View, Calif., across the U.S. and Atlantic Ocean to Europe just by moving a mouse. Now, bulls are betting that the company's closely watched overseas expansion will almost be as easy.

Google got 39% of its $1.58 billion in third-quarter revenue from outside the U.S. And although the company is growing fast everywhere, fans of the search engine giant are wagering that international growth in particular is just about to accelerate.

Shares of Google have more than doubled in the past year as advertisers poured money into search-engine marketing. Forrester Research estimates that U.S. search-engine marketing spending will hit $11.7 billion by 2010, a gain of 170% from 2004. During that same period, spending in Europe will jump 250%, to $3.6 billion or so.

"Their international business is lagging the U.S. in terms of the cycle of its development," says Brian Summers, a portfolio manager at Thornburg Investment Management, which has been adding to its Google position. "Europe is a geography that's going to grow faster than the U.S. They actually have a much higher market share in search there than in the U.S."

To meet the growing demand in Europe, Google has added offices in London, Paris, Dublin and Hamburg and continues to hire more staff there, including 600 in the Irish capital. Rival Yahoo! (YHOO) also is pushing into Europe through new offerings such as PC-to-PC calling.

The popularity of search in the U.S. is showing no signs of ebbing as companies shift their advertising spending away from more traditional media such as newspapers and television.